The Shanghai police recently cracked a huge case of infringing the copyright of the "Lego" toy brand, and finally arrested 30 suspects, involving 1.7 billion RMB.
the infringing toys seized by the police
the website selling fake products of the company involved
According to the Shanghai Public Security Bureau, in August 2022, its Economic Investigation Team, together with the Huangpu Branch, found clues through data research. The toy products sold by an online store were highly similar to "Lego" toys, which was suspected of infringement. Starting from the online store, the police dug up a complete criminal industrial chain that infringed the copyright of the "Lego" toy brand, and found out the criminal fact that the criminal gang headed by a person with family name Chen, without authorization, had stripped, measured, and opened the mold of the "Lego" block assembled toys with registration of its own toy brand, and then engraved them into design drawings 1:1, for large-scale production of imitation infringing toys, and made illegal profit in the final sale at 20% to 30% of the market price of "Lego" toys.
The Shanghai police concentrated their actions to capture 30 suspects, demolish 8 criminal dens, seize more than 600 types of infringing toys, more than 1.2 million pieces in total, and more than 200 molds for crime, involving 1.7 billion yuan. Such criminal acts not only seriously damage the rights and interests of enterprises, disrupt the market order, strike innovation vitality, but also infringe on the legitimate rights and interests of consumers.
Since 2022, the economic investigation departments of the city’s police have protected the legitimate rights and interests of more than 120 well-known brands at home and abroad, covering more than 20 fields such as clothing, bags, daily chemical products, beverages, epidemic prevention materials, as well as literary works, audio-visual products, animation images, and application software, and cracked more than 60 cases of commercial bribery and damage to business credit and commodity reputation involving the advertising industry, medical equipment industry and other fields, The innovation, creation and entrepreneurship vitality were strictly protected, and more than 20 brand rights holders expressed their thanks and praise to the Shanghai police in various forms.
In addition, the Economic Investigation Department of Shanghai Police visited and invited the Municipal Food and Drug Administration Office, the Municipal Market Regulation Administration, the Municipal Intellectual Property Office and other departments in five batches, as well as more than 20 foreign-funded enterprises in Shanghai, exhibitors and sponsors of the Import Expo to carry out discussions and exchanges, widely listen to their demands of intellectual property protection, and provide reasonable suggestions.
(Adapted from the news released in the Wechat account of Shanghaifabu)
Comments by ZHANG Xin, Attorney at Law of Shanghai Yiping Law Firm (business partner of SPTL):
From the information released through official channels, the investigation of this case referred much to the final judgment made by the Shanghai High Court in 2019 in the case of copyright infringement of the Fischertechnik Combination Model. To be specific, among the infringing toy products involved in this case, the possible carriers of copyright include: drawings in the model instruction manual (usually including assembly parts drawings, assembly step drawings and 3D modeling drawings of the finished products), and physical finished products obtained from the actual construction of parts. Among them, drawings in the form of printed matter can be protected as graphic works, while the whole set of components delivered in the form of physical material can be protected as model works as a whole. By including physical components in the scope of copyright protection, the calculation of the amount involved in the alleged infringement can be based on the selling price of the whole set of toys, thus helping the rights holder to claim the nature of the case as criminal civil cross case, and increasing the strike force and relief effect.
Background information (provided by CHEN Shenjun, Director of Shanghai Yiping Law Firm (business partner of SPTL)):
In the era of Internet economy, the concept of intellectual property continues to break through the tradition, and the risk of intellectual property crimes continues to increase. Under the new situation, the Amendment (XI) to the Criminal Law of the People's Republic of China was adopted by the 24th Session of the Standing Committee of the 13th National People's Congress on December 26, 2020 and came into force as of March 1, 2021.
In the criminal law before the amendment, the maximum punishment for intellectual property crimes did not exceed 7 years' imprisonment, and the maximum punishment for the crimes of counterfeiting patents and selling infringing duplicates was only 3 years' imprisonment. Compared with the infringement of legal interests of intellectual property crime and the amount involved in the crime, it is difficult to properly punish and prevent it. The Criminal Law Amendment (XI) has raised the maximum statutory punishment to 10 years' imprisonment, significantly improving the criminal punishment and deterrent effect on intellectual property crimes.
The crime of counterfeiting a registered trademark stipulated in Article 213 of the Criminal Law before the amendment does not involve any act of counterfeiting a registered trademark in services. After the amendment, the original criminal law article "Use the same trademark as its registered trademark on the same kind of goods" has been revised to "Use the same trademark as its registered trademark on the same kind of goods and services", thus effectively filling the loopholes in legislation. With regard to the crime of copyright infringement as stipulated in Article 217 of the Criminal Law, the Criminal Law Amendment (XI), while supplementing and improving the acts in Items 1 and 3, added the act of "reproducing and distributing the audio and video recording of his performance without the permission of the performer, or disseminating his performance to the public through information networks" as stipulated in Item 4, and the act of "intentionally avoiding or destroying the technical measures taken by the rights holder to protect copyright or copyright related rights for his works, audio and video recordings, etc. without the permission of the copyright owner or copyright related rights holders" stipulated in Item 6, increasing the scope of protection, of which the newly added Item 6 is the provision on criminal protection of technical measures to protect copyright, which responds to the thorny problems faced by copyright protection in the digital era. In addition, the Criminal Law Amendment (XI), for the crime of infringing trade secrets stipulated in Article 219 of the Criminal Law, has more detailed types of acts in legislation. For example, it has changed "inducement" to "bribery, fraud", solving the problem of unclear meaning of "inducement".
The Criminal Law Amendment (XI) has gradually shown its practical effect in judicial practice. The above case is just the new development under this general environment. We can believe that this new development will gradually form a good atmosphere for intellectual property protection and create a stable and predictable law-based business environment for economic development.
